China eases property investment rules for foreigners

China is considering relaxing controls on inbound foreign investment by only regulating sectors where activity is restricted, the government said.BEIJING: China has relaxed its propertyinvestment rules for foreigners across the country, a government statement showed on Thursday, providing a fillip to the real estate market and stumbling economy.

Foreign institutional investors no longer had to pay registration fees when taking out domestic and foreign loans to finance their property purchases or when settling foreign exchange transactions, the Commerce Ministry said.

Foreign individuals and companies were also now free to buy as many properties as they wished, as long as they stay within the limits of local housing purchase limits where they exist.

Previously, foreign residents were allowed to own no more than one property in mainland China, and only after they had worked in the country for a year.

The website showed the notice was posted on Aug. 19 but it could only be viewed on Thursday.

Allowing foreigners to invest more freely in China's housing market could bolster growth in a key part of the Chinese economy, which is otherwise struggling with a cooldown in exports, factory output and domestic investment.

A plunge in China's stock market in the summer followed by another bruising fall this week also sent shockwaves across the world, leading some investors to fear the Chinese economy is headed for a hard landing.

To prevent the world's second-largest economy from hitting the skids, China has ushered in a flurry of support measures this year that include this week's interest rate cut, the fifth since November.

Authorities also stunned investors by devaluing the yuan by nearly two percent this month but they deny the move was meant to help exporters.

Worth around 15 percent of the economy, China's housing market has stabilised in recent months, helped in part by the rate cuts.

Home prices rose for a third consecutive month in July as sales and market sentiment improved, a rare bright spot in China's otherwise gloomy economic outlook.

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The unused Input Tax Credit (ITC) on goods and services lying with the property developers as on March 31 will be reversed for under-construction properties since the ITC stands to lapse from April 1 for such houses.